Nifty ends below 6100 levels on broad-based selling

Nifty fell for the first time in five days to end below 6100 levels on Thursday on broad-based selling. On the global front, Asian markets ended lower on Thursday, with Japan and Hong Kong leading the region down, as an important measure of Chinese manufacturing activity dropped to a seven-month low. Hong Kong’s Hang Seng Index tumbled after the initial February reading on HSBC’s preliminary manufacturing purchasing managers index slid to 48.3 from a final score of 49.5 in January. Additionally, European shares also sagged on downbeat Chinese and French data. France's service sector shrank the most in nine months in February, with Markit's index for the sector falling to 46.9 from 48.9 in January, well under economists' average expectations for an increase to 49.4.

Back home, Nifty made a weak start on Thursday morning, mainly on the back of soft global cues, as the US markets ended lower over night after minutes of the latest meeting of Fed showed that all members agreed that on likelihood of continuing improvement it would be appropriate to make a further measured reduction in the pace of its asset purchases at this meeting.

The Index fared badly and lost more than double what it garnered in last session, falling first time in last five sessions. The high flier of the last couple of trades, banking sector suffered severe selling pressure and all the major banks posted considerable losses in the range of 2- 4%. SBI the country’s largest lender too lost about 2% despite being on verge of finalising a plan to improve profitability by tightening the belt on asset quality and boosting its fee income stream. The continuous weakness in rupee on dollar demand from oil importers amid weakness in emerging Asian currencies, too kept weighing the sentiments of the market. Meanwhile, traders also remained concerned on report that India recorded an average annual economic growth rate of 8 per cent during the 11th Five Year Plan (2007-12) compared to targeted 9 per cent. Sectorally, barring some resistance in Power and Capital Goods all other indices ended in red for the day. Telecom stocks were particularly under pressure as the guidelines for mergers and acquisitions of telecom companies are expected to be in place within 10 days which may disappoint phone companies because the government has refused to concede the demand that they shouldn't be required to pay market-linked prices for spectrum that comes with any acquisition.

Meanwhile, sectoral indices on the NSE made negative closing. CNX PSU Bank down by 1.95%, CNX Bank down by 1.71%, CNX Finance down by 1.55%, and CNX Service down by 1.25% were remained the top losers in the trade. While, CNX Metal up by 0.34% and CNX Pharma up by 0.17%, remained the gainers in the trade.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, up by 0.59% and reached 15.16. The 50-share CNX Nifty decreased by 61.30 points or 1.00% to settle at 6,091.45.

Nifty February 2014 futures closed at 6107.95 on Thursday at a premium of 16.50 points over spot closing of 6,091.45, while Nifty March 2014 futures ended at 6143.55 at a premium of 52.1 points over spot closing. Nifty February futures saw contraction of 0.81 million (mn) units, taking the total outstanding open interest (OI) to 14.87 mn units. The near month February 2014 derivatives contract will expire on February 26, 2014.

From the most active contracts, Jaiprakash Associates February 2014 futures were remained at flat  .The number of contracts traded was 12,505. 

Tata Motors February 2014 futures were at a premium of 0.8 points at 392.35 compared with spot closing of 391.55. The number of contracts traded was 10,381. 

Reliance Industries February 2014 futures traded at a premium of 3.60 points at 807.75 compared with spot closing of 804.15. The number of contracts traded was 10,967.

Tata Steel February 2014 futures were at a premium of 0.95 points at 367.65 compared with spot closing of 366.70. The number of contracts traded was 12,244.

SBI February 2014 futures were at a premium of 7.75 points at 1484.1 compared with spot closing of 1,476.35. The number of contracts traded was 27,266.

Among Nifty calls, 6,200 SP from the February month expiry was the most active call with an addition of 0.06 million in open interest.

Among Nifty puts, 6,000 SP from the February month expiry was the most active put with contraction of 0.29 million open interests.

The maximum OI outstanding for Calls was at 6,200 SP (5.4 mn) and that for Puts was at 6,000 SP (11.39 mn).The respective Support and Resistance levels of Nifty are: Resistance 6118.22-- Pivot Point 6102.33 - Support- 6075.57.

The Nifty Put Call Ratio (PCR) OI wise, finally stood at 1.50 for February month contract. The top five scrips with highest PCR on OI were DR Reddy 1.42, Infosys 1.32, Adani Ports 1.30, M&M 1.29 and Auro Pharma 1.21.

Among most active underlying, State Bank of India witnessed contraction of 0.13 million of Open Interest in the February month futures contract, followed by Reliance Industries witnessing contraction of 0.04 million of Open Interest in the February month contract; United Spirits witnessed an contraction of 0.47 million of Open Interest in the February month futures. TCS witnessed contraction of 0.15 million of Open Interest in the February month contract and ICICI Bank witnessed an addition of 0.04 million in Open Interest in the expiring February month’s future contract.